Filmed in Berlin in 1980, the film debuted at the Cannes Film Festival, where Adjani won the award for Best Actress for her performance. Possession was Żuławski's only English-language film. In recent years, it has developed a cult following.[2]

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Mark is a spy who returns home to Berlin from a mysterious espionage mission to find that his wife, Anna, wants a divorce. She won't say why, but insists it's not because she's found someone else. Mark reluctantly turns the apartment and custody of their young son, Bob, over to her. After recovering from a destructive bender, he pays a visit to their flat to find Bob alone, unkempt, and neglected. When Anna returns, he refuses to leave her alone with the child but attempts to make amends. He stays at the apartment to care for Bob but Anna leaves in the middle of the night.

Mark receives a phone call from Anna’s lover, Heinrich, telling him that Anna is with him. The next day, Mark meets Bob’s teacher, Helen; inexplicably, she looks identical to Anna but with brilliant green eyes. Mark visits Heinrich, and the two men fight. Mark returns home to find Anna, and beats her, after which she flees. The next morning, they have another heated argument during which they both cut themselves with an electric knife.

Meanwhile, a private investigator hired by Mark to follow Anna discovers she has a second flat in a derelict apartment building. Posing as a building manager, he enters the flat to find a bizarre creature in the bedroom. Anna kills the investigator with a broken bottle. Zimmerman, the lover of the missing private detective, contacts Mark inquiring about his whereabouts; Zimmerman goes to the flat himself, where he finds the creature as well as his dead lover's body. Anna beats Zimmerman in a rage before stealing his gun and shooting him to death.

Anna returns to the flat she shares with Mark, and continues erratic behavior, such as placing clothing in the refrigerator and food in the bedroom. She recounts to him a violent miscarriage she suffered in the subway while he was gone, which she claims resulted in a nervous breakdown; during the miscarriage, she inexplicably oozed blood and fluids from her orifices. She ominously tells him she "miscarried Sister Faith, and what left was Sister Chance." Later, Heinrich goes to visit Anna at her second flat, where he discovers the creature, as well as a collection of dismembered body parts in her refrigerator. Anna attacks him, and Heinrich flees, bleeding.

Heinrich calls Mark from a bar down the street and begs him to pick him up. Mark stops by Anna's apartment first, and discovers the body parts; the creature, however, is nowhere to be seen. Mark leaves to meet Heinrich at the bar, where he murders him in the bathroom and stages it to appears as an accidental death. He then lights Anna's apartment on fire before fleeing on Heinrich's motorcycle. He returns to his and Anna's flat where he finds her friend Margie's corpse outside. He drags the body inside where Anna greets him, and the two have sex in the kitchen. After, he makes plans to cover up Margie's death. Heinrich’s mother phones Mark inquiring about her son. When he goes to meet with her, she commits suicide by poisoning herself.

The next day, as Mark wanders the street, he meets up with his former business associates. They insist he do business with them again. Mark is evasive and flees on Heinrich's motorcycle. He returns to Margie's apartment to find it surrounded by both police and his former employers. He stages a distraction, allowing someone, possibly Anna, to sneak away in Mark's car, but Mark is wounded in the ensuing shootout. Once again fleeing, he has a horrific accident and races into a building where he is pursued by Anna, the police and his business associates. Anna tells him, "It is finished now," and reveals the creature, now fully formed as Mark’s doppelgänger. Mark raises his gun to shoot it but he and Anna are gunned down by a hail of bullets from the police below. Bloodied and dying, Anna lies atop Mark and uses his gun to shoot herself in the back. She dies in his arms and he jumps to his death through the stairwell. The doppelgänger flees through the roof.

Later, Helen is at the flat babysitting Bob when the doorbell rings. Bob implores her not to open the door, but Helen ignores him. From outside, the sound of sirens, planes, and explosions fill the air. Bob races through the flat into the bathroom, where he floats in the bathtub face-down as though dead. The silhouette of the doppelgänger is seen from the frosted glass door. Helen stares, her brilliant green eyes illuminating.

Possession was released in a heavily-edited 81-minute cut in the United States.[6] After an initial limited theatre release in the United Kingdom, the film was banned as one of the notorious "video nasties," although it was later released uncut on VHS in 1999. It gradually developed a minor cult following among arthouse aficionados.[citation needed]

Vincent Canby of The New York Times wrote, "Possession is a veritable carnival of nose bleeds. Because the three leading characters – Anna, her husband, Marc (Sam Neill), and her lover, Heinrich (Heinz Bennent) – all knock each other violently around, they play most of their scenes in one state of bloodiness or another. At times, the living-color Possession recalls Roman Polanski's black-and-white Repulsion, though only because Miss Adjani is required to slice up as many male victims as Catherine Deneuve did in the earlier, far better film."[7]

Variety said, "Possession starts on a hysterical note, stays there and surpasses it as the film progresses. There are excesses on all fronts: in supposedly ordinary married life and then occult happenings, intricate political skulduggery with the infamous Berlin Wall as background – they all abound in this horror-cum-political-cum-psychological tale."[8]

Leonard Maltin wrote of the film: "Adjani "creates" a monster, to the consternation of husband Neill, lover Bennent—and the viewer," ultimately deeming the film a "confusing drama of murder, horror, intrigue, though it's all attractively directed."[6]

Film scholar Kim Newman considers Possession to a "kitsch film," noting: "Zulawski takes his film too seriously, but it's fun all the same...[he] goes mad with his swooping camera, has everything in shot painted in blue and encourages his stars to attack their roles with a kind of stylised hysteria rare outside Japanese theatre."[9] Newman also likened elements of Adjani's character to that of Samantha Eggar in The Brood (1979).[9]

Michael Brooke of Sight & Sound commented in 2011, "Although it's easy to see why it was pigeonholed as a horror film, its first half presents what is still one of the most viscerally vivid portraits of a disintegrating relationship yet committed to film, comfortably rivalling Lars von Trier's Antichrist, David Cronenberg's The Brood and Ingmar Bergman's Scenes from a Marriage."[10] Reviewing the Blu-ray release of the movie in 2013, Michael Dodd of Bring The Noise was similarly impressed with what he called "an intense exploration of marital breakdown". He argued that this made Possession "one of the few horror films that successfully builds a back story for its main characters".[11]